Don't reset your phone, it's useless and you risk bricking it. Mine got stuck but thankfully a soft reset during a hard reset (?!@#) succeeded in unbricking it. But regarding the issue I'm pasting one of my posts:
After having wasted a lot of time talking to clueless wp chat staff trying to convince them that there is nothing wrong with the phone itself or my account I was forced by a staff member I was talking with to reset my phone and set it up again with her help "manually" (I never understood what that meant) but since resetting took too much time I didn't want to keep her preoccupied and was told I could resume setting it up with any other colleague of hers. Well guess what, the guy I talked to next was the first of of 6 I talked with that immediately told me that I shouldn't have reset my phone because the problem is with their servers having an issue that will be resolved and all I can do is be a little patient until they fix it! And of course when I set up my phone again the problem is still there... There's nothing worse when having to deal with support than realizing you know more about the problem than they do and have to persuade them that it's a problem on their side. I grateful this last guy let me know they are aware of it... The first guy I talked with is still "investigating" it, wp support on twitter is still waiting for their "team" to tell them what is wrong, the xbox support rep assured me the terms have been accepted and it's a wp problem, total madness..

Don't reset your phone, it's useless and you risk bricking it. Mine got stuck but thankfully a soft reset during a hard reset (?!@#) succeeded in unbricking it. But regarding the issue I'm pasting one of my posts:
After having wasted a lot of time talking to clueless wp chat staff trying to convince them that there is nothing wrong with the phone itself or my account I was forced by a staff member I was talking with to reset my phone and set it up again with her help "manually" (I never understood what that meant) but since resetting took too much time I didn't want to keep her preoccupied and was told I could resume setting it up with any other colleague of hers. Well guess what, the guy I talked to next was the first of of 6 I talked with that immediately told me that I shouldn't have reset my phone because the problem is with their servers having an issue that will be resolved and all I can do is be a little patient until they fix it! And of course when I set up my phone again the problem is still there... There's nothing worse when having to deal with support than realizing you know more about the problem than they do and have to persuade them that it's a problem on their side. I grateful this last guy let me know they are aware of it... The first guy I talked with is still "investigating" it, wp support on twitter is still waiting for their "team" to tell them what is wrong, the xbox support rep assured me the terms have been accepted and it's a wp problem, total madness..

all - i think it is to do with your IDs. had this issue from day one. could download some apps and not others.
hard reset the phone and created a new id which seems to have done the trick. not sure how this will effect other stuff.
i also did another reset and signed in with my original ID and guess what???... couldnt download the apps i had trouble with in the first place.
things like your skydrive will be effected as you will have a different ID.

now i am going to do another hard reset and go back to my second ID...

Hi again Andy, well it has to do with the IDs in the sense that there is some sort of communication or verification error and the store thinks you haven't accepted the XBOX Terms Of Use, which may be the case for some but usually it's a false detection. I have accepted them and I actually use the same account from my Win8 pc to get apps from the same store. So the problem is obviously with Microsoft and as I said after many wasted hours I found a guy at suppport who knew about it and said they are working on it. Needless to say they should expedite whatever repair it is they're doing since they are losing both revenue and reputation from this mishap.

The resolution for this problem is easy. The reason you are facing this problem is that "Store" thinks that you are a Child and they wouldn't allow you to download any application

Please follow the steps below:

1. On your phone, please go to Settings > Email + Accounts. In the list look for the first email marked as "Microsoft Account".
2. From your phone, use credentials of "Microsoft Account" to sign in to account.live.com.
3. After logining in to account.live.com, make sure that birth date and home country/region are completely filled-in and saved.
4. If you see a message indicating that your password is weak or something, please change to password.
5. If you are prompted to add additional security information, please do so.
6. From your phone, sign in to Xbox.com using same credentials above.
7. You "SHOULD" be prompted to accept terms of use. Please do so.
8. Click on My account.
9. Scroll down the page till you see Billing Contact Information. Click on it.
10. Make sure that information is up to date.
11. Power down your phone and wait for 30 sec.
12. Power on and try accessing Store and downloading apps.

This error code appears when trying to download an app and is caused by incomplete information in your Microsoft account profile or that the Terms of Service for Xbox LIVE were not accepted.

Not sure if you already did below.
Maybe this helps, sign in to your Microsoft account, tap or click Edit personal info, make sure that your Birth date and Home Country/region are completed, and then tap or click Save.
Furthermore did you change the region on your phone?
And remove it out of the wallet and add it again.